The acquiring processor is the credit card processing provider. Typically, a third-party merchant services company or independent sales organization (ISO) works with the acquiring bank to make certain that all transactions for each merchant account through the acquirer are processed correctly. The acquiring processor often handles other aspects of credit card processing, such as refunds and chargebacks; as well as other electronic transactions like debit, check and gift cards. Many acquiring processors also provide in-house merchant account services on behalf of the acquiring bank.
When a cardholder uses an electronic form of payment at a merchant’s location, the customer’s card data is passed through the merchant’s point-of-sale system, such as a credit card terminal or software. When dealing with a credit card, for example, the acquiring processor collects the data and then confirms through the card association or network and the issuing bank that the customer has enough money in his/her account and that the card has not been stolen. The issuer then creates an authorization number and sends it back through the processor so that the transaction can be completed at the point-of-sale, or it denies the request. At the end of the day, the acquiring processor also handles the settlement data when the merchant batches out and provides reporting through the merchant’s point-of-sale system.
Obviously, the process of handling these electronic transactions is not free. The acquiring processor makes certain that the correct amount of processing-related fees are applied to the merchant account and that the merchant receives the correct amount of funds. At least once a month, the company then issues the merchant a statement that outlines everything related to the processing, including the merchant’s current services, rates, amount of transactions processed, the total amount funded and any chargebacks details.
Lastly, an acquiring processor usually offers one-stop customer support and sales services. Many acquiring processors provide cardholders and merchants with chargeback, complaint and retention resolution services through dedicated departments. They also offer billing customer support and round-the-clock transaction processing and technical support. The processor might supply the acquiring bank with sales reps tasked with approaching merchants to open new merchant accounts. Additionally, it might supply inside and outside reps tasked with upselling new services to existing merchants. Many processors also have account managers that provide personalized customer service on large volume and national accounts.